Earnings call transcript Q2 2023

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Operator

Good afternoon and welcome to the WW International Second Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Corey Kinger of Investor Relations. Please go ahead.

Corey Kinger

joining call. for for quarter International's everyone conference XXXX you us WW today second Thank XX:XX about At P.M. today, release quarter reporting Time our Eastern we second XXXX issued results. a press further to The well as provide on investors purpose call update to the is general company's of with financial this as some the details a results, regarding company's provide progress.

Presentations release at the materials under investor available financial on Events. corporate.ww.com. company's as Investors the available is website and are conference on the part the also most company's the non-GAAP press release. on available press directly of Supplemental The corporate comparable located in corporate measures GAAP website Reconciliations this are of to also measures section disclosed call

forward-looking are here should forward-looking results statements. that any begin, cause to that from subject aware those Investors discussed today. that we Before me contain remind be statements let risks differ materially actual everyone could and various to uncertainties will this call

company's explained a with These more are for such and risk of Commission. Securities detailed filings and the filings the discussion factors uncertainties forward-looking in refer these statements. of and Exchange statements in Please to risks detail the

All forward-looking except company required update events future and no of statements as the as publicly forward-looking law, or of are obligation to any statements, new information, today, undertakes revise by whether as result made a or otherwise.

CFO. call today's Stark, CEO; Sima are Heather Joining and Sistani,

the turn to Sima. over now call will I

Sima Sistani

entry XXXX nascent, continues core Watchers, and a clinical Thanks Corey. into our be a today. our we Good afternoon you to where but subscriber business return us everyone and and the growth category. joining for year transformative thank catalyze pivotal to year Weight for

we give the me second trajectory. on Our are right results further confidence only that quarter

reiterate, in hitting that great narrow subscriber including the the our on across targets list year-over-year sign business across We To organization, global also of end a not for are health reinvigorating are growth areas; our core up continuing the we on of and will outcomes. key year. four year, executing focused the deliver priorities one, raised business, but second impact our half of period focused

head compounding of continuing expanding by new increasing start by relationships, for clinical space Three, the partner and brand health drive a our member clinical to Two, space. effective providers, standard-of-care employers end this our efficient that in Sequence, awareness, being and engagement choice end member acquisition management and leveraging the retention. delivers and in model payers, solutions, program expertise, to a to setting step behavioral weight cost

experiences, real increase that and behavioral community building reach and both four, in and clinical for engagement and life pathways. satisfaction both digital And broaden our will

to need. the We doing increase education are for also committed and our communities spectrum health in to part to weight access

with to Now, QX clinical clinical only with subscribers XX,XXX subscribers our reporting QX have This QX did QX in to Watchers our turning business, we Notably, total time up. in Weight adding more quarter-over-quarter further achieved our We we approximately company's subscriber million ended history our in year with base. we subscribers, in an than first is subscribers. step ended the X.X results. including that

for up than our year-over-year. without to return delivering this excluding both expectations up additions the Notably, our Weight above increasing year-over-year one sign growth clinical, sign QX spend quarter growth and XXXX, achieved previously our our Watchers increase subscriber year-over-year ups or of QX first earlier we forecast. business, since for were our marketing

adjusted While gross estate actions our subscriber from real XXXX's as due our margin. structure to drove a base, to record ending revenue headwinds high was and optimize organizational year-over-year anticipated, footprint down

QX the increase was QX, XX% direction year-over-year. X% which and by trend right a engagement rate, to activation continue with our up their during progress metric a on and the program, Additionally, member's first year-over-year days approximately in approximately defined XX compared to

a of activated because matters roughly Watchers half are more member over non-activated the As a rate on activation long-term. reminder, attrition and members Weight successful is rate

XX measured continued Similarly, those is rate, membership across QX base first the in engagement beyond XX% which to entire also of trend approximately days our year-over-year. our positively with

that that along are with are our profitable and us reinvigorating core we to further return informed product business a innovation performance are approach and taking our evergreen These our to for approach evidence up hold, growth. marketing setting results improvements data to

to in moment take as back a weight global as leader health. step more on Let's for share a a I mission our want

this conversation those recall make in in the and As around last management and you accessible term solutions to will to destigmatize need. obesity weight introduced earnings, our from order evidence-based we to reframe achievable

is obesity we're is understanding lose community's prepared and large a This due challenge of misperceptions in obesity, cannot and health factors that or maintain to and biological population weight. treatment health and of The there through loss advancing Weight environmental, spectrum alone. to exercise is and rapidly. of a diet weight scientific the moment watershed growing is a long genetic,

members they can our treatment so their the the we're this they But understand clear, And be not importantly, let need. more of does options get to intervention. lifestyle help me discount prepared importance

market more living medications with to adhere obesity to-date change. for replace They to lifestyle possible sets us apart. in lifestyle where do help And solution people on the not advancements our change. The clinical that's it become

best US a provides been loss for diet than the Sequence ranked one gold is years. weight change as last Weight standard for News the the much number Weight World lifestyle XX prescription. on for has more Watchers and Watchers and Report

one doctor-recommended the number program. are We

experience and have peer of studies randomized XXX have tailored XX proven diabetes years clinically We we XX including more than program over review and over a trials.

coaches, registered access Weight team change plus program. behavior a are Watchers' With to of Sequence, team, clinicians, members fitness supported care Board-certified and a dietitians, by

WW posting of understand a employers; and Investor weight virtual investors Solutions. our providers, our have Watchers Health to program the program, brief offering. Sequence, The about a our our experience on website BXB clinic, are help presentation health. now health better science-backed we improve Sequence that Today, We clinical solutions Lifestyle and Weight payers, for portfolio

weight the uniquely evolving We to to the pair entire spectrum. cover are positioned with health solutions clinical

forefront at be science emerging obesity the in overweight will of the the and voice and leading of work Weight Health. Our

accountability, of community. coaching, our the to roadmap Turning pillars and product digital-first three on focused

are in chat member user As improved beta experience support. discussed previously, of for our peer-to-peer testing new feature connection and and we

the be the chat increases and beginning, work. We for social thereby believe enriching then our create Watchers foundational driving will program what of community, experience LTV. members our is Weight relationships, engagement, community makes which From to retention and digital allowing

North engagement and a life. recently coach precision improve for launched our to digitally our coaches in in We America, members, and with both platform dashboard real

and the relationships platform are touch of Coaches motivation point support, our will scale. this source members, providing them an manage and important at to help

with Continuous Monitor. Glucose Libre completed the integration Abbott's also FreeStyle We

members our Now, learn place, glucose with can activity living food in diabetes how one directly levels. impacts

and health to remain to more easily track weight and in track with We member's to on eat roadmap tab later QX our feature on eating a improvements in a trends support monitor decisions and journey. wet deliver progress to more and

All of leads improvement drive engagement, to which are program, better success which LTV. the expected retention member's in ultimately continued our and to with the

We into ways found in the to the effective most life. person to look continue bring our new to in workshops human connection

opposite. away quite We the workshops, from are not walking

entire part members. bring to We and know our we that our community opportunity members more Watchers impact Weight to to experience that be an of an impactful the that have of connecting

the combination a effective journey. a solution Rather, estate digital-first with of to weight our a is for digital optimizing highly community the We loss believe and experience footprint. one those adjusting we're realities a by workshop an differentiated on in-person real primarily of powerful

well ways unlock reinvent We are more digitally in as I'm ahead. avenues could ability in experiences to lasting as in to exploring our person create like can look together members community. what where confident in come years life to the real our

Shifting the XX,XXX up April closing We're learning ended of XXth. to XX% our since and clinical QX are which pleased the acquisition business. results, quarter the nearly rapidly with subscribers, with on

We shortages to outpaced medications incredible see for demand [Indiscernible]. have that started reported with these for has supply the

will very issues from revenue hear a that have at stage. a keep early access medications about, While these will Heather they is more impact still mind you which in please to supply

will we in grow it exponentially ahead. the But years expect

with new of current we starts Of course, all the fits as medications. capacity are supply GLP-X with any such as are there and seeing industry,

Our the helping alternatives appropriately, the the and care team being prescribing transparent clinicians on across by are navigate members current and formulary. situation environment when

as can on and increase window as peak ahead return In season. scale readiness of of this operations bump of near-term potential the the clinical this this short, utilize up We supply for time a to remain is we see where bullish speed opportunity our we well our an offering. as ahead and long-term

driving three one, things: we during and pathways. misinformation clinical and clarifying this Additionally, education awareness about focused are on time

but members Medications instead possible. Two, for benefits do are clinical benefits for of be to a medications. allow on behavior replace the not dedicated those on program different change, pathway. a needs introducing someone There lifestyle

and develop such lifestyle to prioritizing those expertise mass. lean protecting as a muscle nutrient-dense our a are We that addresses using diet program needs, tailored

expect to subscribers the season. occur prior We rollout a our to Sequence including our market, to upcoming to peak

integrating Watchers members. of needs of three, complementary broad highly a and members one the journeys. and different holistic solutions weight And solutions to meet we now Sequence phases as Sequence evolving their are for through Watchers platforms have Weight to go and and of Weight loss the another, portfolio

also In there Sequence, with BXB is direct-to-consumer our addition business. to

class WW for and while of our effective partner solutions, of The medications payers. emergence will employers for robust posing payers, highly Given challenges management Health weight portfolio alike. health believe Solutions new providers, this I of the are choice be chronic of

hearing to for are they from looking access, employers especially advocate their are as as that for to We guidance manage costs. enable to coverage, want they but employees how

consistent be us a and with feedback of which to their that their track proven addition, science-back they from delivers. to Watchers coming Weight In all need results employers solution is because record

and also while meet model population. has costs provide care based and employee enterprise along with to cost Solutions pathways to to their And clinicians clients managing Health and needs. infrastructure delivering necessary now best-in-class support, behavior a change effective service value WW an it and experienced medication, to XXX has program over

which In confident only results by our encouraged summary, reinforces and halfway XXXX, future. areas right the are view focusing through we that the about my on I'm

the call our to over and Heather to turn results now will financial discuss I outlook. QX

Heather Stark

Sima. Thanks

second our to Turning quarter results.

of closed acquisition XXth, our are business. the line metrics on certain well in Sequence in clinical the of results we as April as announced, are now previously reflected financials and As included

in X.X with and subscribers, with sign approximately canceled including We XX,XXX subscribers, clinical ended million forecast quarter. both QX outperforming our the ups

in that of ended QX taking our first are this and the is a QX. than history mentioned, grow additional time working. proof reporting actions Sima are base is with an that subscribers higher to This business stabilize the subscriber we the As point

line this with constant Revenue products rationalized lower and the totaled reported business. year, reductions down as product entering subscriber basis, America and of due currency consumer base planned we XX% was which continued coupled business primarily a year-over-year, North wind skews both in of $XXX on the the to million, the our in

contributed Adjusted In our our partial gross Clinical of basis as a points record XX.X% margin and XXX the to our base for to offset. a year, in international cost was markets. estate revenue $X prior from primarily actions with up due high real restructuring. quarter million workshop reduce fixed the

below $XX were ups efficiency and improved nimbleness increase with and trends, marketing Marketing achieve and down were above GLTV able to were our year-over-year million plan. planned adjusting expenses sign to spend and of X% capabilities our we performance both

expenses, Adjusted in G&A purchase clinical were $X consideration million and year-over-year. price accounting million Restructuring controls $XX from of the amortization intangible up was inclusion including by of G&A offset million X% $X.X expense patients. savings in approximately

charges income $X the million. $XX totaled Restructuring operating was million Adjusted quarter. in

rationalize and centralized certain streamline our organizational further to non-strategic and business lines. structure continued We

margins We largely And studio count our record helped to delivery we $XX on completed and drive actions. our fixed of XXXX of anticipated track our shifting deliver high reducing flexible are real studio our locations, to lease in estate workshop or by savings at studio from gross which third-party portfolio million QX. adjusted rebalancing the

transaction million income not acquisition costs. debt other do our accounting compensation within charges post are Related adjusted transaction, $X leverage to transaction stock-based EBITDA net employee and adjusted incurred combination the for the costs for approximately vesting are operating non-cash and These we to attributable ratio. Sequence to Sequence of impact included non-recurring not

the in million negative high effective unusually year with $XX company's reflects evaluation of of XXXX and full quarter, an last which loss pre-tax benefit consistent the allowance small impact a fiscal rate, driven the guidance. was tax in Income quarter, reflected by tax annual

the comparability items GAAP of valuation EPS mentioned including earlier. $X.XX which of incorporates was costs positive net and the impact charges, acquisition restructuring net impacting $X.XX, of million transaction allowance, $X the

business. Turning to Sequence and of our line clinical

end XXth. with is pleased efforts ongoing are integration period QX We XX,XXX the and on April members, of performance subscribers up Sequence. XX,XXX early at were approximately from closing which of

modest after expect income in of operating to excluding QX XXXX. gross margins generate and acquisition-related XX% expenses, north we and were cash flow

time multi-year while and we strongly our are the are constraints to growth is As Sima demand, increase there overwhelming utilizing believe mentioned, this term supply opportunity shorter readiness. significant due scaling to

trends Weight member outlook, our acquisition, and encouraged to execute enhanced for are on we them our we to Watchers the operating data-in-front the we an in experience Shifting continue product our member the the and business of subscriber balance seeing are with deliver roadmap. by expect from our increased benefit year core approach efficiency, to as

of to the expect end with our X.X to the the of end from year, expect XXXX. of at above clinical up We X.X X.X subscribers million year million approaching excluding of up this, Weight X.X guidance be total from Within prior Watchers million. the million, subscribers we at end

thereby continue, of subscriber business, the lowering near-term we as expectations assuming clinical remainder the our challenges supply clinical Sima mentioned, XXXX. For for are medication

mean the subscribers reminder, a sloping our end of peak traditionally QX annual trends a that business QX to our is As period in and trough. seasonality

year outlook would ending the we've seasonal seen represent subscribers subscribers. been total one the Our million at of best since X.X slopes reporting of

With the compared with full we to coupled $XXX $XXX in to prior of the subscriber our constraints million expect revenue $XXX be near-term $XXX supply mix guidance to a year to of clinical million million. business, million in range shift,

guidance medication We in QX $XX revenues shortages. due lower to aggregate, to million, for to our million of down expect previous from clinical QX $XX subscriber reflecting be expectations

we clinical, we have will reduced year. subscriber tailwind the since and levels time a our expect revenue next While including addition the anticipated entering first XXXX, XXXX revenue modest of we have subscription increasing year-over-year given expectations, into our for

consumer to products and other. Shifting

made As we return e sunset that matter decision our actions to the most consumer our prioritize initiatives the success offerings. have to will and commerce growth, and and drive member we to products

our in scaling allow the and exit resources. we better we've As the operations an us business, on US to communicated, will back but streamline previously allocate began further

planned XXXX. Products sold completion by will end run until the be quantities of with out a

While we approximately in XXXX, $XX guidance will revenues prior headwind expect be a and will in million and recur $XX into be with consumer to line XXXX. during products contribute roughly revenue and million other revenues not

our we continue expect neutral still plan to income. to however, high roughly We licensing operating this Importantly, margin be business.

expected is for XX% from to previously. the in XX% Adjusted range gross margin be XX% up full the of year, to to XX%

our and have through our we mix higher benefit continued to base our As optimizing of we the cost real are shift digital seeing a reduced business fixed estate read will of footprint. having by

We million. for to be year marketing expect continue full to spending flat XXXX at $XXX approximately

value As calls, we to focus on plan member primarily and redeploy can to prior half highlighted high CAC we first QX, LTV where acquisition, maximize in our efficiency. into savings, continue to marketing

up drive sign We these confident consecutive of will growth second actions QX. in year-over-year a are quarter

to than Adjusted for G&A savings. of expense to is organizational million approximately expected lower guide $XXX year, million the the $XXX due be restructuring previous and incremental

operating clinical $XX improved of from impact expect million end revenue range Watchers adjusted the $XX we of benefit shortages to million the guidance Weight income half mix our and back we the in business, supply towards shift control. provided to high as previously margins from mentioned expense previously Despite and be

are incurred costs As transaction mentioned adjusted $X included costs we income. earlier, in including excluded now QX of acquisition operating adjusted income approximately operating from previously million that

EBITDA impact However, accounting amortization $X this presentation intangible price is which to adjusted considerations, the do purchase debt million or change of in leverage. from not EBITDA equally of inclusion offsetting net

to up plan will million. remaining that related restructuring charges We estimate $XX the to be XXXX

year, the to expense by approximately driven discussed valuation income of and transaction the million, allowance tax $XX full impact impact we to be acquisition For excluding earlier. of $XX the full restructuring million costs, the expect largely

business, nature income of QX was our expense highlighted happen quarter, to outside as the In to fiscal given last we which expected largely tax pre-tax quarters of the in income, earlier. to mentioned remaining expect reverse. the QX, XXXX we seasonal started As when

consistent the with of we full benefit Excluding an million of for year, to from allowance, income valuation the impact last the quarter. expect expectation $X tax our up

As in to result in loss can loss XXXX a pre-tax income reflected results. full guidance, pre-tax impacts or year expense significant the updates company's in income reminder, tax fiscal small quarterly the expected tax the any given

structure Turning of million undrawn Sequence with in an ended in to our cash of QX million approximately paying QX, completed earlier revolver. cash $XX We flows. capital and after for the $XX cash plus purchase

we our debt. more With credit our cash restructuring position than related facility, plus our working have revolving in liquidity for servicing near our actions sufficient cash needs, and our including outlays capital to

use in will a cash expect payments. approximately $XX cash operations to from modest for continue full We the be restructuring million that year cash to expected due of the

ratio At debt leverage was times. adjusted quarter end, EBITDA X.X net our to

leverage month XX through transformative increase trailing EBITDA most to of lower XXXX year. in our levels to ratio expect We due further this

ratio are the to committed We as business we improving to our profitable return leverage growth.

expense $XX million. still full We year to be approximately expect interest

through have total term $XXX variable rates million $XXX we floating. protect Therefore, interest reminder, are debt and XXXX only is against a rate million As fixed $XXX XX% to QX a hedged million loan rate. rising our notes our of on of our

starting for we We effective exploring debt current are transitioned the June currently from forward hedges LIBOR. options note, Of swaps and away reference rate instruments for expire. for when XXth, swaps the our

SOFR adjustment rate month reference a transition. credit from is the spread to largely any new direct term Our impact economic one remove plus

is As our impact such, on interest a there limited expense.

to is guidance range, expected million of the intangible above. primarily be is and to the due to in prior which to mentioned million, from reflect Depreciation CapEx, $XX software million acquisition higher amortization $XX the in capitalized be range. the slightly expected is $XX than Sequence amortization

improved cost for strategy growth. are gross meeting, against in our structure trends, Encouraging exceeding objectives. position cases, our and we well XXXX summary, profitable well and executing us some In margins, and record subscriber

call return back to now the Sima. will I

Sima Sistani

Thanks Heather.

innovative work hard paying and are thinking team's off. Our

on for with foundation the the solutions growth turning Watchers spectrum trajectory next health. serve subscriber weight setting to corner while are our of full back Weight and of a portfolio We a getting chapter the

returned a without marketing subscription year. our To into next clinical XX% and our tailwind subscribers, going reiterate, business scaling our of the in increasing program are budget, mouth sign-up for has increase medications. close revenue primarily and a nearly half and back fueling on increasing lifestyle growth Weight word drove positive in our for a Watchers up developing the driving operations, readiness acquisition growth of since members We to to subscriber the return dedicated

first rates digital engagement increased our product community. focused and advancing our We on accountability, and activation have by coaching, roadmap,

our record high business company structure, are margins. gross on committed We our prudently, the to and are adjusted reducing and are driving reducing managing we cost focused the returning profitable And to leverage. growth,

Life Before we Board our and turn earnings Brown, and Tara of the CEO of to Walgreens and former and Officer the Chief Kamat, Diabetes Q&A, last venture Bio Retail Executive member new Sciences, Strava, current and our to highlight Endres Dr. President Tomorrow of board Chief Chief former three officer subscription at and of Medical the Humana. of platform Horowitz, for a Connected partner, Officer Health would a of board Customer leading Directors I members Tracy at call. the Association. and Fitness. Schrenk, at former since member like and EVP American U.S. William

our additions, further our something global you health weight these cover leadership entire spectrum, weight aligned leader With to health. Thank in for with extending thought the we are as joining us. the vision completely

your happy are now to We questions. take

Operator

first Instructions] Jason of question from begin come go Please question the [Operator now answer Sachs. will The English ahead. session. We and will Goldman

Jason English

it appreciate in, though $XX you're I Like Congrats me on subscribers, the uptick in with What the it. constraints revenue still being subscriber. decent the uptick surprised on because revenue million, driving trim clinical get capacity that slotting than in per the I a forecast. surprise. new the million for cutting Thanks welcome it's cut and on suggests drugs, subs that? little $XX a is base drop but the a more just folks. business I'm the Hey, on

Sima Sistani

seeing The are revenue the that question. external is between about know, the factors and that the clinical. core really we're the clinical driven workshop. you majority Hi, it balance by of Thanks is for making supply we Jason. mixed Yes, shift as adjustment of on of medication the

signing which as workshop the a margin business, folks up higher the for we're So seeing digital business more versus is well. business

gross So total impact we're of seeing some shift our and improvement that revenue driving margin. in also

Heather Stark

broader like should add that hey I is that the with too, there And part to of economic story. consistent is Jason,

So and digital. we're members choosing back workshop our are seeing QX labs some who of coming in

is so really But, macro up from perspective. in remained XX year points stable with year. this February versus seeing feels And NPS we're earlier and what year, that line of fact a over XX has in

still and feel their we connected as good people program. are connected the and So the way digital staying option staying as just that choosing must brand a it seeing to have really the of to

Jason English

for me Understood. And side. the on more one clinical up follow

was the more think, you're this going resolution aggressively that But will I be of sorry distracted, gives you drug later sort launch and I I what adequate if wrong correct heard that. enrollment enough? you or New me supply think this confidence I year uptick on the Year's if to say cycle, I'm before so,

and always on really viewed And So do you actually be on those understand the Because stand updates drugs clinicians. do would them helpful. secondly, the to operate capacity? timing of enough Do And enough you the both a potential is twin One bottleneck. side? of is, you telehealth I've as prescribe? where other the have this to you. I Thank have clinician

Sima Sistani

no. Yes,

onboarding clinicians of season. is think is I additional wait of be already number we to acquisition, for and up people the what was comes on available the even Sequence to we the on Look, specific XX that to and a be when list one peak just GLP-X we're that going are we that itself, back have of the had there clinicians. that on opportunity. is clarify real scaling ready this for supply since ahead journey, So the a said program yes, lifestyle And

ready the comes to but shortage supply we back for on. their is and this needs, do our in to obviously, for don't so and allowing up members their us meantime, it's the when is And experience like be the this, scaling what

Jason English

there others, respect Out and Thank it. my you. to it on. stop Got pass I'll of

Operator

Stanley. The Please Schenk Morgan next ahead. of Lauren from go question comes

Nathan Feather

Hey, if want it driver everyone. what's to in for on on between kind the on lower the expected just demand, Lauren. potentially Nathan performance. trying Is It's to access would can lower kind mechanics core through is Sequence year? dynamic? can't impacts if gross ad or dynamics get they dig per behind And of sub-base think your as just pause that. Feather strong subscribers, people I the a bit little supply, Congrats or higher churn revenue the the the the there find not mean, lower for I charge you year and enter supply, to of would a subscriber they revenue we and how key revenue? it

Sima Sistani

look, Sequence didn't this Yes, days, Obviously, we it's medications and our early confident get by to investments right. really a Nathan. Thanks, XXXX, barrier and to going that within and to being outlook. be of issues we're certainly long-term not there supply for are manufacturers made are more so, acquire pipeline the lots

and we in touch when you we're can and come how doing them imagine, expect back with that and on. to can As top-to-tops understanding supply

ends happening, offer importantly, their supply or step one formulary, wide going and on this out mitigate if through different just a understandably, to for up impact What people our able let portal, started we're back we're a getting churn. me to while we the cases, get medication, does and unable is of lot have of they're that waiting program, But finding we more a other – say month-to-month are our a dosages is not through and then does take care by finding customer, medication the, pharmacy the in that bran. or a that so somebody

pushing seen people us In recent the really even not lot haven't by We in much is that driving experience to your do you a want activity supply funnel issues. top we're the funnel purposeful. into as you meantime is because then who means NPS it of poor what of have of though, and our a impact report, cross-selling don't noticed

the So, through having this up sure experience, great being, really time thinking opportunity ends readiness for making spend and us an mentioned, as are to current overall. members our increasing scaling, this a I

Nathan Feather

really That's you. Great. helpful. Thank

Operator

Linda Bolton-Weiser from D.A. comes question Davidson. next go Please ahead. The of

Linda Bolton-Weiser

Yes. Hi.

shortage developments crack that a adequately, seems analyst, understanding, we without happens that seen start actually my against suit to it's file is about and up their Novo like a like issue drug the have it So, my compounders. supply when Nordisk news understanding on that on is these down articles sign drug being they starting some compounders. that And ramping when to

then increased to I this seems the would shortages contrary, was to surprised I'm be guess about So hear like the there when the news supply. it actually that

can that? just Yes. Can on on comment you that? just So you comment supply.

Sima Sistani

they're sex old mean, saying has through will I been September. Look, also at in NOVO shortages XXXX of Yes. end They've X.X, public the dosages and that that and X beyond. still seeing be go X.XX, through said sender

compounded on nothing people it of to to there's going says. issues. it But frankly, has loss products. use have Your guess their medications perspective bad their unquote actually after is terms is as kind weight of effects out a lot do or are actors, and they poor their market lot side results and with good substances, quote when as And mine, I think, the my on a misinformation, in of then of what there the they're, brand the the names, in explain compounder

I'm a it's reel being actors. think felt that in very sound happy but I So, and on that a confirm is strategy market, the are there still to strategy bad their broader in we shortages the the part, can much

Linda Bolton-Weiser

Is it like months it or you is growth? And month-to-month? you can year-over-year? there us able trend can also or trend trend positive it year-over-year there say member is which steady, your variable Are how just kind the turned to is about going? And ask growth, just to just I of return of any of is any Okay. tell way acceleration of

Sima Sistani

Linda. Hi,

want all improvement a our here I of I time up the towards the but recall through solid subscribers the pointing pinpoint specific This step our, wouldn't the for had course time, our QX to first helps. base. we QX in on we're into seeing Hopefully in XXXX up step in we're is think that QX QX, ending we're with of in growing moment and making trends towards of subscriber now a change continued out in year. progress step again and continued history. out

Heather Stark

add, and activation And the smile. from are just I've that hey, working. making I'll what the said rate leading saying a this indicator, is changes continues number is to beginning, it is we're

So excited to about what's are really we come.

our fall. trends coming biggest eat We the and and, haven't tab and introduced even yet what we've that are the noted features to progress in

first experience us is leading and putting work. learnings this so, to a digital with And informed data really our

Linda Bolton-Weiser

me. it you. Okay. That's Thank for

Sima Sistani

you. Thank

Operator

The comes next UBS. from of go question ahead. Please Michael Lasser

Isabel Thompson

everyone. This our members in I'm for Were do increase only just the for question. subscribers second Hi, factors there only constraints behind acquisition Isabel these closed. reason since supply is moving you forward? Thank a was in quarter Lasser. modest or faster the were play those Michael Thompson. there clinical the alone, the Sequence Maybe been marketing ramping And business other to you how here? at haven't taking the plan put

Sima Sistani

Isabel, question. thanks for your

to the through note formulary and really, by reflecting in our that And our modest. So will disagree I'll environment program. that of since that care customer, again again, traction uptick But we also program, goes I our saying saw a through XX% to our is shortages. wide help members acquisition through is start I ability that Sequence supply

have able to I Health we spectrum. And provide these We're the Weight synergies. big solutions want across emphasize that to really

clinical both Watchers Weight combining care. of intervention the Now lifestyle with

to creating synergy billing, side, marketing. have channels. to important another where identity to regarding our tech solutions. going all your we're TAC efficiencies between we're starting one combining through also That's And the question On we're

intervention ability marketing. site demonstrated and our to from clinical people to and drive our have We on interest tests initial the performance

we we've of we're we and standing that Watchers alongside But because top during protect brand to funnel, can of Sequence Weight ROIs. here ensure the has want NPS the been not combination improved shortages. supply the testing on we see again, really the And

to more expect has the when we really improved. do of So environment that macro

Isabel Thompson

And currently maybe sign-ups how and the a a separately, any new of Thank sense of you. core have program many are GLP-X then, you discounting then do That's members existing doing as higher taking you there? drive helpful. are follow-up, to very prescriptions? And

Sima Sistani

question. discounting the to I'll speak first

do pay on, ramped to plans. like subscription going And approach other So, approaches businesses similar say, longer-term have or should is members discounting. up I discounting to always quite to where joining they not we we necessarily our best-in-class less much it's would differentiated activities commit have.

with as really to the long-term. and revenue to carrying and in-year that pricing XXXX promotional we're accretive both activity and is continue So, we're operate CLTB that such that to in we be out and in the see both proving discounting pleased out

really we're outcomes. the with So, pleased

Isabel Thompson

you. Thank

Operator

Oppenheimer. comes The of go Brian next from question Nagel Please ahead.

Unidentified Analyst

for you our for William is Thank This Hi. Brian. questions. on taking

quite I but topic realize I touched a little to wanted differently. bit, a ask this bit just on So, maybe you've that

the on QX Our question the QX. step-up in is core in from membership

upon of You you look step-up? first discuss mentioned would that other business drivers the also, and in And marketing way any you reinvigorating the further your this efficiencies. to offering Can membership of your cadence changes the going half forward?

Sima Sistani

lot but We're product LTV We're modern to of performance. with global sign data approach. of our is and drove decisions regions, Look, better under organization. cross Sure. marketing, awareness and seeing alignment plan momentum more We performance informed performance moving a continued spent are in-house with a up. data-informed Health our marketing reflection nimble thanks Hey centralized the new channels, and better just Weight drivers the marketing. William. on improvement, This cross overall and

the lots forthcoming work the being with are part that's as of front, our resonance I more in of think media messaging. So been awareness a that I and activity, it, doing, we authentic mentioned and on

about not improvement. more today, mouth And product. word better first loss, We've this in up engaged. is of that which clear, And that sign a signal people is a weight is we they're days, their be let's the just but said finally, product XX doing them activation

people have drive we we about which have, more MPS, with up hear when it, about talk it, success so And it.

And not does positive only signups. impact the so a on it has further driving retention on organic it also side, help but

that period mentioned, is achievement about. reporting as first all I QX, the think combination a we that company's excluding is clinical in sub and our of spoke just history. the QX of I above is So, things and the But that a time

Unidentified Analyst

Excellent.

how is on the To carry this the and it balance extent then to you you when to de-lever question Our that look sheet. out? would would next do you somewhat, plan

Sima Sistani

that liquidity pleased way a strong our runway. activity. would in capital something, don't or I solid would anything our be I intention did act But William. question, for committing I timing of in leverages absolute priority, our and to all wouldn't benefits you, be Thanks though. our I or producing say, think actions stakeholders, that to though, do scale and time, of or terms with the this at further. speak would if we Thank

Unidentified Analyst

you. Thank

Operator

Jason ahead. from English question The is Goldman Please a of go next Sachs. follow-up

Jason English

Hey, again, slotting more me in one for time. thanks back

myself, more. going just was come had I I back So, to help to for

patients program own. There's through this who later out insurability coming on to GLP-X such lifestyle some aren't my guess as behavior chatter to of employers around potentially around viability I is of program mentioned question make applying sort year. GLP Sequence. been that modification looking on You there patients come to the the conditional, on your for some

I employers. a with And potential deep-seated of of lot relationships you've got know many those

are vague. as be my that? could recommend about that and of there I future you So is is viable think a authorizing forward, like What and now. appreciate the choice you. the is discussions rambling very question with program that. a the a relationship? or employers of as giving actually participation kind program But you these they having requiring yours solution of where use but likelihood we Thank on for a you they these, I'm

Sima Sistani

you came Hey, more. Jason, for I back that love

benefit. in we new covered But question. also great it's is lot to our and BXB have this incoming perk past the been employers of now and of existing business as and as are talk enterprise our Look, as We've from payers for experience. a employers running requests we lot a viewed well a about who been So, a more want a getting years.

of need it's to is manage medication. somebody disease, figuring for hypertension, And then high other preventative their a some the recover cancers. that by the cholesterol, to helping they such to tool that way And population means out way best medications Heart and the able life-changing the these provide be that cost diabetes, to chronic conditions, right?

they can of case intervention and how do clinical get whether move need we them that need lifestyle it's spectrum where basically off and what a ends a needs, fall patient take intervention, plus lower cost for lifestyle on over medication in people So bucket and entire the in population they de-escalate them that employee Health happening Weight medically a their into if whether time account medication. up is pathway, the they either and/or which and to then we appropriate that different for

we're to in that Clinic by Also, are running some and science these the right efficacy doing the in the some of institutions other, show discussions the now active this so work plans. And We're is of partnership doing with. side, we on way, trials. Cleveland with

we therapy I been mean, because And uniquely is because think so it's provide there, are program, across servicing out that infrastructure the that studied for just able we because that solution to enterprise most we XX yes, intensive have it around I to because say, evidence-based is existing years, really our the have behavior and clients.

that the side. So BXB on

a American Nutrition training of is who's providers published Sequence, was nutrition sort not than why say, our of Journal students throughout U.K., a in Human the this medical come about according to that say for just average but any you is nutrition program. have to would XXXX Board not medications, that one doctor. of entire Medicine Sequence that and or only Certified My and of medical we had they hours want receive brother program an or from students getting an in lifestyle I class. of what remember X% survey us which Most and matters members, of to less have to medical nutrition what anybody Dietetics. the He Now whether these training U.S. only XX of

to up that it outcomes across alongside and in able about bring and having medications ability about these these reason up intervention manage entire titrating effects and on I also time and this the the journey lifestyle are and to you the with side seeing down. to this manage trials has dosages get the hearing being you're The that do is of that

or process. you just whether it's an other inhibitor, might it. a you et And statin not is take so like one medication, It's really this take high support then just cetera, it, where ACE a that's just, and conditions this

So to anyways, clinicians participate, is unique, training, leadership close makes our period. are so say it the unique, Sequence because our able program program why this the XX-week our program who one our specialized are that and Sequence so empathy. really better our clinical oversight rigorous who Sequence clinicians clinicians makes because just with all twofold, get through by to training the members on guide a onboarding they're team, They get

lifestyle to I provider says also think for important of important our differentiator any their trying an our be support that's it program patients. who but why current would program, is

that guidance facing, that to cetera. They can to that may patient ongoing et lean Watchers symptoms how various now be build density, know nutrient Weight least recommend they be and that at will on how getting think about mass, muscle

Jason English

end Thank stuff. much. there. Good so it you I'll

Sima Sistani

you. Thank

Operator

over back This the question to like concludes answer Sistani closing conference our session. turn to would remarks. I and Sima any for

Sima Sistani

Not achieve their of ability QX our inflection point solutions in growth year the trends Weight will returning our help be performance, subscriber our Health. an serve are in to trajectory. members be encouraged portfolio us by highly a in results, which full to dramatic a only the improvement our of through also to I'm spectrum XXXX goals but of

of forward upcoming to speaking we Conferences today, our September. look and at including the us Thank for We with Healthcare Morgan Baird conferences, updating Stanley joining to you many forward progress. look you in you at on and

Operator

you Thank now The now for today's conference disconnect. presentation and you may is concluded. attending

WW International (WW) 3 Aug 232023 Q2 Earnings call transcript